International Settlement Test__ 3(1).doc

International Settlement Test 3. Define the following terms.(16%)1. letter of credit2. irrevocable credit3. confirming bank4.negotiating bank. Decide whether the following statements are true or false.(20%) 1. A letter of credit places a banks credit instead of a commercial credit, so the beneficiary has no risks to get payment. ( f )2. The issuing bank cant dishonor the documentary bill when the documents are complied with the terms and conditions of the credit whereas the goods are not complied with the contract. ( T )3. A commercial invoice is a statement describing the merchandise, its cost, and shipping charges. ( T )4. The main responsibility of banks under L/C is to examine each document presented to see whether it appears on the face to be in compliance with the credit terms.( T )5.An irrevocable credit cannot be amended, revoked or cancelled. ( F )6. Instructions for the issuance of a credit, the credit itself, instructions for an amendment thereto, and the amendment itself, must be complete ,precise and not include excessive detail. ( T )7. When the issuing bank nominating another bank to advise the credit, the latter can select to advise the credit or select not to advise the credit. ( T )8. When a bank decides to advise the credit, it shall take reasonable care to check the apparent authenticity of the credit which it advise. ( T )9. A revocable credit can be cancelled or amended by the issuing bank at any moment and without prior notice to the beneficiary.( F )10. When the issuing bank adds the word “confirm” in the credit, it means the credit is confirmed by the issuing bank, then the issuing bank becomes the confirming bank. ( F )11. The bill of lading is evidence of the contract of carriage between the applicant and e carrier. ( F )12. Banks deal exclusively with documents means they are not in a position to verify whether the goods supplied are actually identical with those specified in the credit. ( T )13. Unless otherwise stipulated in the credit, a transferable credit can be transferred only once. T )14. The bank will accept the bill of lading indicated with the notation as “on board” or “on deck”. ( F )15. The beneficiary of a transferred credit is the middleman. ( F )16.The applicant is liable for repayment of the advances if the beneficiary failed to present the documents called for under the red clause credit. ( T )17. If an issuing bank increases the amount from USD20,000.00 to USD25,000.00, the issuing bank shall be irrevocably bound by the amendment by it , the confirming bank may extend its confirmation to the amendment or not extend its confirmation to the amendment. ( T ) 18. The issuing bank, the confirming bank, or nominated bank shall each have a reasonable time, not to exceed 3 days following the day of receipt of the documents, to examine the documents. ( F )19. A bank will not accept a cover note. ( T )20.A bill of lading that bears a wording “bale broken” is an unclean bill of lading. (T ). Choose the best answers to each of the following question.(20%)1. The drawee under a credit can be（ BCDE ）.A. negotiating bank B. issuing bank C. paying bank D. accepting bank E. cofirming bank2.When examing the documents under credit, the principles involved include（ABCD ）.A. banks deal exclusively with documentsB. banks observe the rule of “strict compliance”C. banks assume no responsibility for authenticity, form or validity of the documents D. banks assume no responsibility for the act of the third parites taking part in the credit operationsE. banks take secondary liability 3. When there is a middleman in international trade, the available credit are ( BD ).A. reciprocal credit B. back-to-back credit C. negotiation credit D. transferable credit E. revolving credit4. (ABCD ) need to examine the documents before payment.A. Issuing bank B. Negotiating bank C. Paying bank D. Accepting bank E. Reimbursing bank5. When it is dishonored by the issuing bank, (ACDE ) dont have the right of recourse to the beneficiary.( )A. confirming bank B. negotiating bank C. paying bankD. accepting bank E.deferred paying bank 6. The middleman has the right to substitute the ( CD ) in back-to-back credit.A. bill of lading B. insurance document C. commercial invoice D. draft E. certificate of origin7. When buyers apply to open a credit, they must obey the rules as ( ABC ).A. refer to documents only B. be clear concise C. do not specify impossible documentation D. have adequate funds in his account E. on commercial basis8. As precautionary measure, security arrangement may take the following forms ( ABC ).A. margins B. line of credit C. third party guaranteeD. application for credit E. confirmation9. The functions of a bill of lading are ( ABCD ).A. as a receipt of the goods B. as evidence of the contract for carriageC. as a quasi-negotiable document D. as document of titleE. as a key accounting document10. When beneficiary presents the documentation to the bank, the principle involved （ ABC ）.A. completeness B. correctness C. consistency D. standard E. simple. Analyze the principles and cases in international settlements and give your opinion. (24%)1. Terms such as first class, well known, qualified, independent, official,competent or local used to describe the issuer of a document allow any issuer except the beneficiary to issue that document. Unless required to be used in a document, words such as prompt, immediately or as soon as possible will be disregarded. The words to, until, till, “from” and “between” when used to determine a period of shipment include the date or dates mentioned, and the words “before” and afterexclude the date mentioned. (UCP600, Article 3)答：用诸如“第一流的”、“著名的”、“合格的”、“独立的”、“正式的”、“有资格的”或“本地的”等词语描述单据的出单人时，允许除受益人之外的任何人出具该单据。除非要求在单据中使用，否则诸如“迅速地”、“立刻地”或“尽快地”等词语将被不予理会。信用证作为审单的标准，应该确保用此准确和唯一性，如果出现了一些表示不明确的规定时，为确保信用证的顺利使用，这些不明确的规定将被忽略。这也要求申请人在申请开证时应做到清楚、简洁。2. A bank assumes no liability or responsibility for the form, sufficiency, accuracy,genuineness, falsification or legal effect of any document, or for the general or particular conditions stipulated in a document or superimposed thereon; nor does it assume any liability or responsibility for the description, quantity, weight, quality, condition, packing,delivery, value or existence of the goods, services or other performance represented by any document.( UCP600, Article 34)答：信用证业务中，银行对任何单据的形式、充分性、准确性、内容真实性，虚假性或法律效力，或对单据中规定或添加的一般或特殊条件，概不负责；银行对任何单据所代表的货物，服务或其他履约行为的描述、数量、重量、品质、状况、包装、交付、价值或其存在与否也概不负责。信用证处理中银行不涉及商业事务和商业纠纷，仅就单据的表面是否符合信用证的规定进行审核，而无需处理单据本身的真实性和单据相关的货物状况。3. On 11, July, 2005, a beneficiary received the following L/C. Before the validity of the credit, the beneficiary presented a set of documents to the bank, indicating the quantity: 995 tons , the amount : USD99,500.00. The issuing bank dishonored for the reason as: “The quantity and the amount are not complied with the terms and conditions of credit.”IRREVOCABLE CREDITL/C amount;: about USD100,000.00Unit price: USD100 per ton, quantity: 1000 tonsTotal price: USD100,000.00, C.I. F., New York 答：开证行拒付理由不成立。UCP600第三十条：信用证金额、数量与单价的伸缩度 a款规定：“约”或“大约”用于信用证金额或信用证规定的数量或单价时，应解释为允许有关金额或数量或单价有不超过10%的增减幅度。本题信用证前出现了大约字样，因此受益人提交单据的金额中出现上下10%的增减都属于可接受范围。USD99,500.00属于上下10%的增减范围内，因此开证行的拒付不成立。.Practice(20%) Please answer the questions according to the given credit. In the commercial invoice, the maker is SUMITOMO CORPORATION,TOKYO (Yes/No), the consignee is JIANGSU NATIVE PRODUCE IMP. AND EXP.(GROUP) CORP.，NANJING. (Yes/No) (2%) The amount of the commercial invoice is JP￥3,001,123.13, its complied with the terms and conditions of the credit. (Yes/No) (2%) Please fill in the draft according to the credit.(7%)Exchange for _ Nanjing, 14, April, 2005At _sight pay to the order of_the sum of_Drawn under _ _To: _ For: _ _ List the required documents. (1%) When the Air waybill indicates the goods have been sent by partial shipments and transshipment, it is complied with the terms and conditions of the credit. (Yes/No) (1%) This is a confirmed credit. (Yes/No) (1%) If the date of shipment is 31, March, 2005, the beneficiary must present the documents within 15, April, 2005. (Yes/No) (1%) The total amount insured is USD3,385,882.5. (Yes/No) (2%) The issuing bank will accept a full set of insurance policy. (Yes/No) (1%) Jiangsu native produce Imp. & Exp. (Group) assumes to pay for the banks charges. (Yes/No) (1%) The documents must be sent to the drawee bank in one lot. (Yes/No) (1%):MT: 700 01:40A form of documentary credit: IRREVOCABLE:20 documentary credit number: 100934028D-01001: 31C date of issue:20050314: 31D date and place of expiry: 20050415 P.R. OF CHINA:50 applicant: SUMITOMO CORPORATION,2-2 HITOTSUBASHI, CHIYODA-KUTOKYO:59 beneficiary: JIANGSU NATIVE PRODUCE IMP. AND EXP.(GROUP) CORP., 36 GONG YUAN ROAD. NANJINGTHE PEOPLES REPUBLIC OF CHINA:32B amount: CURRENCY JP￥3,078,075.00:41-: available with /by: ANY BANK BY NEGOTIATION:42C: drafts at: DRAFT AT 90 DAYS SIGHT:42-: drawee: THE MITSUI TRUST AND BANKING CO. LTD. HEAD OFFICE, TOKYO:43p partial shipments: PROHIBITED:43T transshipment: PROHIBITED:44A loading in charge: CHINESE AIRPORT:44B for transportation to: NARITA, AIRPORT:44C latest date of shipment:20050331:45A shipment of goods: 700 KGS NET OF CHINESE ROYAL JELLY (PRODUCTS BY LAOSHAN FACTORY) IN REFRIGERATED CONTAINER AT JP￥4,510.00 PER KG NET. LESS DISC. 2.5% CIF NARITA AIRPORT:46A: documents required:+SIGNED COMMERCIAL INVOICE IN QUINTUPLICATE (5) INDICATING APPLICANTS REF NO. MCC1-94-0120 WHICH MUST BE GIVEN ON ALL OTHER DOCUMENTS+PACKING LIST IN DUPLICATE+FULL SET OF CLEAN AIR WAYBILL CONSIGNED TO SUMITOMO CORPORATION TOKYO AND MARKED FREIGHT PREPAID AND SHOWING SAME NAMES AS NOTIFY PARTY AS CONSIGNEE AND INDICATING ACTUAL FLIGHT DATE+FULL SET OF INSURANCE CERTIFICATES ENDORSED IN BLANK, FOR 110PCT INVOICE VALUE COVERING THE INSTITUTE CARGO CLAUSES(ALL RISKS), AND THE INSTITUTE WAR CLAUSES AND THE INSTITUTE STRIKES RIOTS AND CIVIL COMMOTIONS CLAUSE AND I.O.P. CLAIMS ARE PAYABLE IN JAPAN IN CURRENCY OF DRAFTS.INSURANCE TO BE EFFECTED BY SHIPPER+ORIGINAL GSP FORM A, CERTIFICATE OF NO ANTIBIOTICS AND COPIES OF CERTIFICATE OF QUALITY ALSO REQUIRED:47A: additional cond.:1) SHIPPING MARKS SHOULD INCLUDE SUMIT IN TRIANGLE.2) TRANSPORT DOCUMENTS WHICH